Aviva Personal Pension Plan · CAS-34706-D1M2

CAS-34706-D1M2

Ombudsman’s Determination Applicant Mrs N

Scheme Aviva Personal Pension Plan (the Plan)

Respondent Aviva Life and Pensions Ltd (Aviva)

Outcome

Complaint summary

Background information, including submissions from the parties CAS-34706-D1M2

“This illustration assumes that the pension would be payable by regular monthly instalments starting from 7th August 2013. The pension would be payable for life, with a guarantee that the instalments will be paid for 5 years in any event. On death or after 5 years if later, instalments would continue to be paid for the lifetime of the widow. For the purpose of this illustration we have assumed that your wife’s date of birth is 6 May 1950”.

“The illustration assumes that the pension would be payable by regular monthly instalments starting from 7th August 2013. The pension would be payable for life, with a guarantee that the instalments will be paid for 5 years in any event.”

“We enclose a Post Sales Information sheet for your information and would also like to remind you that you have 16 days to change your mind. If you do decide to change your mind, please return the cancellation notice issued with your Retirement Benefits package. You must also return the Post Sales Information sheet and any instalments of annuity you have already received.”

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“Benefits on Death

On your death, payments would continue at the same rate to the end of the guarantee period on 29 August 2018. There are no further benefits due at the end of the guarantee period.”

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Adjudicator’s Opinion

Mrs N did not accept the Adjudicator’s Opinion and the complaint was passed to me to consider.

Mrs N provided significant submissions, including a copy of another provider’s application forms, to demonstrate that Aviva’s application forms were misleading in comparison. In summary, Mrs N said:-

• As a “layman”, Mr N would not have understood the poorly worded annuity application form which she feels did not ask the basic questions.

4 CAS-34706-D1M2 • There was no tick box for Mr N to choose whether he wanted a single life or joint life annuity.

• Aviva did not provide support to its policyholders and had poor business practices.

• Aviva made assumptions on Mr N’s instructions instead of checking with him or the IFA whether the annuity should have been on a joint life or single life basis. This would not have been “financial advice” as Aviva would just have been checking it understood Mr N’s wishes.

• In 2008, Aviva confirmed to Mr N that the Plan had reached maturity and that his benefits would include a spouse’s pension. Mr N then deferred his decision to take benefits until 2013. She considered that Mr N would have therefore expected the annuity to be set up on the terms at maturity in 2008 with a spouse’s pension.

I agree with the Adjudicator’s Opinion and I will therefore only respond to the main points made by Mrs N for completeness.

Ombudsman’s decision I appreciate that this matter is difficult for Mrs N as she was expecting to receive a spouse’s pension from the Plan after her husband had died.

Mrs N contends that the Plan’s original documentation from 1988 said a 50% spouse’s pension would be provided, as did the illustrations sent in 2008. Mrs N also says that Mr N must have misunderstood the information and annuity application form sent in 2013, as they were not in “Plain English”.

The restrictions on Protected Rights were abolished by the Pensions Act 2008, with effect from 6 April 2012. Having considered the information, I am satisfied that Aviva acted correctly in offering Mr N a choice on the format of the annuity payments from the Plan in 2013. Aviva was right to offer Mr N the option of an annuity with no spouse’s pension in 2013.

Mrs N has argued that Aviva does not support its policyholders or operate “good business practices”. However, it is not Aviva’s role to provide advice on suitable options at retirement, that would be the IFA’s role. I am satisfied that Aviva made Mr N aware of his options when taking his retirement benefits from the Plan, as he was sent explanatory notes and illustrations showing both a single life and joint life annuity. If Mr N did not understand the options available or how to complete the annuity application form, he could have asked for clarification from Aviva. As a “layman” he also had access to the IFA, who would have been an expert in this area.

Mr N returned the annuity application form and, once it was received, Aviva was obliged to set up the retirement benefits in accordance with Mr N’s instructions. It was not for Aviva to then double check Mr N’s choice with him. Mr N selected an annuity 5 CAS-34706-D1M2 with a five-year guarantee with no spouse’s pension. It is clear that Mr N received benefits in line with his instructions to Aviva and Mrs N received the remainder of the five-year guarantee payment when Mr N died.

Mrs N contends that Mr N did not understand his choices as the documents were not clear, and that Aviva should have recognised this as he had crossed out some areas of the annuity application form. However, Mr N did not challenge Aviva on how the annuity had been set up when he received the cancellation notice in 2013. Nor did he raise questions in 2015 when Aviva reconfirmed there was no spouse’s pension payable from the annuity. I find that the information given to Mr N was clear and accessible. Based on Mr N’s communications with Aviva, it is reasonable to state that he knew there was no spouse’s pension payable on his death.

I do not uphold Mrs N’s complaint.

Anthony Arter

Pensions Ombudsman 7 July 2020

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